February 22nd, 2010
12:02 PM ET

CNN Fact Check: Canadian health care drawing automakers north?

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/02/01/art.granholm.cnn.jpg caption="Granholm: overstated the break that manufacturers get in countries with universal health care."]

Matt Smith

Arguing for the need for a sweeping overhaul of the U.S. health-care system, Michigan Gov. Jennifer Granholm said Sunday the high cost of health insurance is driving jobs in her state's automotive plants north
across the border to Canada.

Speaking on "Fox News Sunday," Granholm, a Democrat, said every car built in the United States "has $1,600 worth of health care cost embedded in it, whereas other countries - and they're our competitors - don't have that cost.'

"Those auto companies weren't going there because of regulation, or taxes or anything, they were going there because there's a partnership on the part of the Canadian government with health care," Granholm said. "Now, we don't want to create that exact same system, but I can tell you that other countries are providing health care for their businesses so they can compete globally. "

Fact Check: Does Canada's health system save auto manufacturers $1,600 a car?

- Granholm cited a widely circulated figure often attributed to General Motors. A CNN report in 2008 found that the costs of the health plans negotiated with GM's unions added about $1,600 to the cost of a vehicle.

- Canadian industrial recruiters do cite the country's government-paid health insurance as a plus in attracting industry. A brochure put out by Ontario's provincial Ministry of Economic Development and Trade touts it as a "clear advantage" in core operating costs for companies located there.

- But is the score $1,600 to nothing? There's a big gap, but health care in other countries not cost-free. Ontario officials say the cost of employee health benefits for companies there is about half what their U.S.-based counterparts would pay. And the comparable figure for Japanese automaker Toyota's plants back home, where the government requires companies to provide health coverage to employees, is about is about $200.

Bottom Line:

The figure Granholm cited for U.S. automakers matches up with other published estimates. But her comments appear to overstate the break that manufacturers get in countries with universal health care.

Got something that needs checking? Email us at factcheck@cnn.com

Filed under: auto bailout • Health Care
soundoff (3 Responses)
  1. Ratna, New York, NY

    A few points I need to make:

    America is very dis-organized when it comes to health care spending. Money is literally thrown away. Why are hospitals going bankrupt and have to close down due to the free-market system?

    When we say: "Health care SPENDING is going up" it actually means "Health care COST is going up". Here we are going again confusing and mis-phrasing the elements.

    Here is what I agree on with President Obama:
    *As long as lobbyist keep their power intact, pharmaceuticals will stay expensive (and they don't care about the gazillion side effects; for example diabetic meds like Avandia and Actos) A friend of mine was prescribed this drug by the doctor and felt worse after taking it and stop taking it. He was not on Insuline and his Diabetes was reversible and it did. His MRI showed a weakening in his arterial walls. How did this drug reach the market???? Lobbying ofcourse!!!

    *Health Care Costs will be reduced by PREVENTATIVE MEASURE:
    It is arranged in dominoes setting:
    1. In order to prevent sky rocketing nation wide chronic disease or acute infections we need: NATIONWIDE EPIDEMIOLOGICAL ASSESSMENT.
    2. In order to gain information for a NATIONWIDE EPIDEMIOLOGICAL ASSESSMENT, we need a nationwide DATA GATHERING SYSTEM.
    3. In order to gain this nationwide DATA GATHERING SYSTEM we need to have an nationwide EMR system set up.
    4. In order to have this nationwide EMR system we need NATIONAL HEALTH CARE!!!!

    Wow!!! America Wake Up!!!!

    February 22, 2010 at 4:58 pm |
  2. Retired LE

    Companies are heading to Canada because of health care costs. And Canadians are heading to the US to GET health care that they can't get in a timely manner in Canada....

    Looks like there is more to the issue than meets the eye here....

    February 22, 2010 at 2:01 pm |
  3. Tim Gibson

    The answer cannot be government picking up the tab. Business and people must pick up the tab and stop leaning on government as a cure all, catch all.

    February 22, 2010 at 12:54 pm |